Earnings: Not enough to impress, but better than feared

Are earnings doing better than expected? This is a big week for company progress reports, and there are some encouraging signs that both quarterly profits and guidance are not going to be as disappointing as feared.

Today, the market was treated to better than expected results from apparel & footwear maker VF Corporation (which confirmed 2013 full-year earnings), Lennox (the heating and ventilation company which hiked the low end of its 2013 guidance), and Hasbro are all helping offset disappointing commentary from McDonald's.

Both VFC and LII are at historic highs.

Over in Europe, better than expected earnings from Akzo Nobel (paints), Royal Phillips (lighting, healthcare, consumer products) and especially SAP (enterprise software) are being reported.

Bottom line: Earnings were lowered once again as we ended the third quarter, to around 3 percent growth year over year, and it appears they have once again been lowered too far.

The big worry is that earnings for Q4 will be cut dramatically due to the government shutdown; current estimates are for earnings to grow roughly 9 percent. If historic standards hold, that will come down to roughly 6 percent; if it gets close to zero, the markets will have a major problem with that.

One problem: Revenue gains are still tough to come by. Of seven major companies reporting today, every one beat earnings estimates but five of the sevenfell short on revenues.

Elsewhere

1) Asia was especially strong with Japan up 0.9 percent China's Shenzen Index up 1.6 percent. The State Council (the highest executive body) noted that growth had stabilized and urged Beijing to press forward with economic reforms.

2) Honeywell (HON) trading down as they cut their outlook for business jet deliveries in 2013.